Grynberg: The Chinese Connection!

Prime Minister Stephenson King: When will he address the nation on the true status of the St Lucia seabed?

How many more red herrings will Earl Huntley’s Sea at Dauphin potboiler throw up before the true status of the Saint Lucia seabed is finally settled? The latest diversion is a proposed debate between the MP who revealed the existence of a 9-year-old hitherto unheard of Kenny Anthony-Jack Grynberg contract and a local talk-radio host. By all accounts the parliamentarian has dismissed the proposition as preposterous and its proposer as lacking locus standi. The gentleman disagrees. As a leading citizen of the Rock of Sages, he proudly points out, he has as much right as anyone else to debate what in recent weeks has become the nation’s premier public concern—and with anyone reckless enough to accommodate him. On the other hand, the campaigning MP obviously is seeking to fry bigger fish. Why permit himself to be distracted by krill when clearly he is hunting a baleen whale?
As I say, to engage in hot-air exchanges about imaginary royalty payments is as puerile as is a debate over pie-in-the-sky oil. Besides, when an issue centers on elected officials and public accountability, there can be no room for surly surrogates, self-appointed flak catchers and oozing orifices for hire. Who controls a resource as important to a nation as its seabed cannot be a matter over which to flex egos—especially when on a daily basis disturbing revelations, like back-street muggers, jump out of the shadows to assault the people’s faith in their system of government. Consider the following 27 October 2005 report by James Norman, accessed from Petroleumworld.com and headlined CNOO Affiliate takes 50 percent Stake in huge Caribbean exploration tract:
“Shanghai Offshore Oil Group, an affiliate of state China National Offshore Oil Corp, emerged Wednesday as the 50 percent owner and operator of 31.4 million acres of Caribbean exploration territory, in what could be one of China’s largest foreign upstream exploration ventures. The farm-in of the five concessions, stretching from Grenada, just north of Trinidad, to St Vincent and the Grenadines, Saint Lucia, Martinique and Guadeloupe, could be one of China’s largest foreign upstream exploration ventures. The positions had been assembled by maverick Denver wildcatter Jack Grynberg and his private RSM Production. Grynberg signed the farm-out documents late Wednesday local time in Shanghai.”
Yes, dear concerned fellow Saint Lucian, you read that right: a Chinese company with 50 percent ownership of our nation’s seabed. Feel free to speculate about who owns the other 50 percent. Might he be a certain “maverick Denver wildcatter” hooked on litigation? (By the way, my dictionary defines “wildcatter” as “a risky investor; a prospector who sinks exploratory oil wells.”)
According to James Norman: “Grynberg is to operate the concessions through further seismic acquisition due to resume soon, using a Chinese vessel. SOOG will nominally operate during the drilling phase. But with its limited track record in upstream operations, speculation is that the Shanghai refining and product marketing company will turn over effective control to China National Offshore Oil Corp.”
All of that action, without any conversation with the trusting people of Saint Lucia or with the day’s Cabinet, if Grynberg’s “trusted associate” Earl Huntley is to be believed. But what of the Chinese connection? Is it still in place seven years later? What does Kenny Anthony know about it? Did he authorize the maverick Grynberg to farm-out the Saint Lucia seabed to whoever caught his personal fancy? What does the current administration know about this disturbing situation—and when did it know?
It may be worth pointing out at this juncture that according to the 2000 agreement between Saint Lucia and RSM Production Corporation, under the rubric Assignment: “The company may not assign to any person, firm, company or corporation not a party hereto, in whole or in part, any of its rights, privileges, duties or obligations under this agreement without the prior written consent of the government, which consent shall not be unreasonably withheld. However, the company shall be free to assign by instrument in writing, its rights, privileges, duties or obligations under this agreement to an affiliate, provided that no such assignment shall in any way relieve the assignor of any of its obligations hereunder.”
Moreover: “Any unresolved dispute or difference aforesaid shall be submitted for settlement by arbitration to the International Center for the Settlement of Investment Disputes . . .”
But already a certain Dominican QC is snorting at my exposed neck, boldly purporting that everything so far written on the subject is slanted to serve the narrowest purposes of a general election many believe to be imminent—that his word alone is free of prejudice and therefore worthy of public trust. But even so, why waste precious time on fringe debates and mindless speculation? Why can’t we hear directly from those best informed about this subject of obvious national importance and who, as elected members of parliament, lest we forget, owe the people verifiable accountability?
The lawyer’s response is that his favorite Saint Lucian client is under no obligation to respond to what together they insist is fiction. Presumably they expect the continually underestimated concerned public to be satisfied with the obvious brush-off. As for the day’s prime minister and minister of finance, no excuse has yet been proffered for his prolonged inexplicable silence.
Meanwhile, Tony Astaphan is typically unstoppable. Not only does he consider the Grenada-Grynberg decision a precedent beneficial to Saint Lucia, he has further assured concerned citizens that if Grynberg retained his interest in what may lie beneath our seabed he would not have remained silent on the issue for “over two years.” A convenient conclusion, I dare to say. The inconvenient truth is that Grynberg has not been silent. As soon will be seen, his interest in our country’s seabed, far from having diminished, is as strong as it was eleven years ago. Judging by all he has in recent times written, he obviously believes the law is on his side when it comes to the confidential contract he inked with Mr Astaphan’s client in 2000.
And now, I offer fresh confirmation of the lengths Jack Grynberg is prepared to go to retain for the foreseeable future his lock on our nation’s seabed. In a letter dated June 1, 2011—yes, as recent as that!—his legal representatives in New York addressed to the former deputy prime minister of Grenada the following:
“We have become aware of published articles which suggest Mr Bowen is assisting the government of ‘St Lucia’s effort to extricate itself from an agreement signed with questionable businessman Jack Grynberg.’ ” If what is reported in the articles is true, Grynberg’s lawyers advised, “this constitutes tortious interference with the business and contractual relations of RSM and Mr Grynberg.” The lawyers warned that Bowen is exposing himself “to the imposition of very significant damages.”
So much for Astaphan’s calculated assurance that Grynberg has lost interest in Saint Lucia and consequently the government can safely walk away from their agreement.  Even if the locally renowned QC were correct, no sane businessperson would risk doing business involving the Saint Lucia seabed until a court has rendered such transaction safe from retaliation by the famously litigious Colorado oilman.
In the meantime, it seems there is a not-so-subtle on-going PR effort to present Grynberg in the most flattering light. Not so long ago, Kenny Anthony himself seemed to be posturing on TV as a satisfied partner. He explained that the prime ministers of Grenada, St Vincent and Saint Lucia “were persuaded to work with a single company because of the fact that the islands shared marine boundaries. As in other islands, Grynberg Petroleum was only granted a license to explore and determine if Saint Lucia had deposits of oil, at Grynberg’s own expense. The government of Saint Lucia did not have to spend one cent.”
We still don’t know who persuaded whom to work with the Colorado oilman. But we do know that just two weeks after signing an agreement with the government of Grenada—yes, two weeks—Grynberg cited marine boundary disputes and invoked the agreement’s force majeure clause. We get a hint of how Grynberg financed his expeditions from James Norman’s above-cited report. As for the exploration licenses, it remains in question whether in the case of Saint Lucia they were legally granted.
One thing for certain, Grenada’s association with Grynberg finally proved very expensive. For not only did the oilman tie up the island’s seabed for several years, it cost taxpayers over ten million dollars before a court restored control to the Grenada government. With reference to that particular episode, Kenny Anthony said on the record: “The government of Grenada decided not to renew or extend an exploration license to Grynberg Petroleum. The company sued, argued the same ground of force majeure which it has raised in Saint Lucia. In fact, Grynberg Petroleum lost to Grenada. The same principle applies to the interpretation of the agreement with Saint Lucia. So it is ingenuous to say that Saint Lucia is disadvantaged by any binding license for an extended period of years. If Grynberg was a con artist, why was his license renewed in St Vincent?”
If only the issue were as simple as Kenny Anthony spun it on TV. But let’s address his last question first, with another question: “Never mind St Vincent’s attitude to con men, why did the former Saint Lucian prime minister grant and renew licenses for Grynberg’s operations despite the oilman’s on-going disputes with Grenada?
Moving right along: Contrary to Kenny Anthony’s assertion, Grynberg never asked Grenada to “renew or extend” an exploration license, if only because one was never issued. The oilman was required to apply for the license within 90 days of signing his agreement with the Grenada government. Instead, he invoked its force majeure clause that permitted him legally to freeze related obligations on his part. He then tried to kiss and make up some four years later, by which time the government had discovered more about Grynberg than they were prepared to overlook. He took the matter before the ICSID, in the hope the tribunal would force the government to grant him an exploration license. The tribunal finally ruled that Grynberg should have applied for it in the time stipulated. Both parties were directed to meet their own legal fees and share costs.
It is especially interesting to note that Grynberg invoked his force majeure clause just six months after signing the Saint Lucia agreement, in effect suspending all of RSM’s obligations under the agreement. Did Kenny Anthony seek the proper advice as to his next move? There is no question that in 2004 he extended the effectively frozen agreement for three more years. Was Kenny Anthony at the time incapable of properly interpreting the Grynberg agreement? Or has he only recently acquired such expertise?
It is worth repeating yet again that the Saint Lucia situation is at heart quite different from that of St Vincent and Grenada. Unlike the case with the other two islands, Saint Lucia’s agreement inherently granted Grynberg his exploration license, no special
application needed. Both Grenada and St Vincent required Grynberg to apply for an exploration license no later than 90 days after signing their initial agreements. What remains very much in dispute is the all-important question—whether Grynberg is on solid legal ground when he insists that until the reasons for invoking force majeure are satisfactorily dealt with, his contract with the Saint Lucia government will remain on hold, not aging and very much alive.
Meanwhile, a related address to the nation by the prime minister is long overdue!

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